The Concept of Blockchain Explained

The Concept of Blockchain Explained

The utilization of blockchain is one of the hottest business concepts that made heads turn this year, as it quickly makes its way to businesses such as financial sectors, entertainment industry, e-commerce and so much more. But not everyone is ready to embrace this kind of technology, as it gained contrasting opinions from different business sectors. In this article, we will explore the process of blockchain, and the mixed views that came along with this concept.

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Flickr by BTC Keychain

What is Blockchain?

Blockchain is a type of database technology which is primarily designed for digital bitcoins, but as of late, have also been used in making “direct” linked databases. This technology has the ability to update automatically since this can be managed using the internet. With the use of mathematics and encryption, blockchain can provide an open and “decentralized” environment for transferring things like documents, money and other valuable resources.

Simply put, blockchain is a technology improvement concept that aims to enable direct  transferring of assets from one individual to another – without the help of third party services.

Blockchain Concept Interpreted

Here is an example that will further explain the basics of blockchain:

Party A wants to transfer $15 to Party B — So usually, when it comes to financials, money is sent from Party A to Party  B with the aid of a third party entity which act as mediator for the payment, as it identify the account before continuing the transfer.

Of course as you know it, there’s a fee to it, and it may even count several business days before Party B receives the money sent by Party A.

With the blockchain concept, it aims to remove the third party in the equation, lowering the fee, and of course since there’s no need for further recipient identification, then participants can receive the money in a much faster way.

Chain Divided By Point of Views

The concept of blockchain gained mixed reactions from various business sectors, as opinions were divided on how this technology could change businesses, or if there’s really a room for decentralization in today’s economy.

According to Don Tapscott, CEO of the Tapscott Group, he believes that this emerging concept of blockchain could revolutionize businesses as well as the world economy itself, since blockchain focuses in decentralization, it also mean that the database technology could “facilitate collaboration and may track all kinds of transactions”.

Meanwhile, Rod Drury, founder and CEO of Xero Accounting software , when asked by Business Insider on what he thinks about this incoming business phenomenon, he stated:

“I think it’s mathematically interesting but I think the nature of the world at the moment — surveillance culture and tribalism — means it’s very unlikely that a distributed view of the money supply is ever going to happen.”

He even added:  “Bitcoin and those sort of things are interesting around the fringes. [But] it’s a very elegant solution that’s looking for a problem.”

Blockchain is quite becoming a challenge to some industries because it is set to change the way businesses see the “the status quo”, but only time would tell if the world would be ready for this technological change.